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Dombrosky v. Farmers Insurance Co.

November 8, 1996

VINCENT DOMBROSKY AND ELLEN DOMBROSKY, HUSBAND AND WIFE, APPELLANTS,
v.
FARMERS INSURANCE COMPANY OF WASHINGTON, A WASHINGTON CORPORATION, RESPONDENT.



Appeal from Superior Court of Pierce County. Docket No: 91-2-07898-5. Date filed: 12/23/94. Judge signing: Hon. Waldo F. Stone.

Order Granting Motion to Publish Opinion December 6, 1996, Order Amending Opinion February 7, 1997. Petition for Review Denied April 2, 1997,

Authored by Elaine M. Houghton. Concurring: J. Dean Morgan, Carroll C. Bridgewater.

The opinion of the court was delivered by: Houghton

HOUGHTON, A.C.J. -- Vincent and Ellen Dombroskys' home was damaged by fire. The home was covered under a Farmers' insurance policy. After a protracted dispute with Farmers over the nature and extent of coverage under the policy, the Dombroskys filed suit against Farmers, alleging breach of contract, insurance bad faith, violations of the Consumer Protection Act, and various tort claims. They also requested prejudgment interest. All of their claims were dismissed on summary judgment and the Dombroskys now appeal that decision. We affirm.

FACTS

On December 20, 1990, a fire damaged the Roy home owned by the Dombroskys. At the time of the fire, the Dombroskys were living in Yuma, Arizona for the winter with their two minor daughters. Their son, Steven Dombrosky, and his family were living in the Roy home. The fire started in the chimney and then spread through the roof and other portions of the residence. In the effort to extinguish the fire, the Roy Fire Department used approximately 7,000 gallons of water and three pumper trucks.

The Dombroskys were covered under a Farmers "Special Form Homeowners Package Policy" at the time of the fire. This policy contained provisions to cover the structure, repairs to prevent further damage after a loss, damage to landscaping around the structure, living expenses incurred after a loss, and, by endorsement, replacement costs for damaged personal property within the structure. The limits of the policy were $115,000 for damage to the residence, $5,750 for damage to landscaping, and $80,500 for personal property losses.

Following the fire, the loss was reported to Farmers with an initial claim request. This claim included loss to the structure, landscaping damages, loss of personal property, and additional living expense. Farmers' claims representative Bruce Hubbard contacted Steve Dombrosky on December 27, 1990. Hubbard was granted permission to obtain an appraisal of the property and to retain the services of a contractor to perform temporary repairs on the structure to prevent further weather damage.

Several construction companies were contacted to provide bids for repair. At least two of these, Dray's DMF, Inc. and Modern Builders, told Farmers that because of the numerous building code violations at the site, it would not be possible to obtain a building permit to repair the structure. Dray's was paid to prepare a repair estimate anyway and provided one on March 2, 1991 in the amount of $50,252.33.

On February 22, 1991, Farmers tendered a check for $28,000 to the Dombroskys, which was returned on February 28. The Dombroskys claimed that they did not agree with the appraisal and bid. Farmers proceeded to pay for an additional appraisal and bid. Guilford and Associates provided an actual cash value appraisal of $68,000. Great American Homebuilders, Inc. estimated the cost to replace the structure at $94,500.

On April 3, 1991, a check was tendered to the Dombroskys for $22,253.33, representing the difference between the February 22 payment and the Dray's DMF, Inc. repair estimate. *fn1 This check was returned April 12, 1991, because the Dombroskys did not agree with the amount of loss as determined by Farmers.

Throughout this exchange, the parties disagreed as to the nature of the payments. The Dombroskys cite several communications from Farmers to assert that the payments were made only as partial payments and did not alter their remaining claims. Farmers asserts the payments were full amounts intended to resolve the claim and that the Dombroskys knew the terms of the contract regarding the prerequisites to receive additional funds for replacement expense. The Dombroskys eventually cashed a replacement to the check issued on April 3, 1991 in the amount of $22,253.33.

In response to inventory sheets on personal property damaged in the fire, Farmers tendered a check to the Dombroskys on April 26, 1991, for $37,959. The parties disputed certain items of personal property not included in the payment, the characterization of some personal items under the policy, and the method by which Farmers calculated depreciation on some of the items. Farmers informed the Dombroskys they would be entitled to additional replacement costs once the items were replaced and proper receipts were submitted.

On July 3, 1991, Farmers' attorney requested an appraisal of the loss. Farmers denied the request. The Dombroskys presented more receipts for loss associated with the landscaping, pool, and additional items of personal contents.

The Dombroskys purchased a recreational vehicle and a new home in Arizona in December of 1991. The source of the funds for these items is in dispute. The Dombroskys claim they obtained financing, while Farmers asserts they used the insurance proceeds. The Dombroskys returned to Arizona and spent no more funds to repair or replace the structure in Roy.

The Dombroskys sued Farmers alleging breach of contract, negligence, insurance bad faith, outrage, and violations of the Consumer Protection Act. Farmers sought and obtained a court ordered appraisal hearing. Fred Butterworth was appointed to act as umpire. *fn2

The parties agreed that an appraisal panel would determine alternate values of the loss and the trial court would decide the amount owed under the insurance contract. The parties further agreed that the appraisal would not consider contents, additional living expense, or the landscaping claim. The panel made the following findings:

The actual cash value of the structures at the time of the fire: $32,000;

The replacement value of the structures without the additional cost for compliance with new building code requirements: $75,000;

The replacement value of the structures including the additional cost for compliance with new building code requirements: $85,000. This award was affirmed by the trial court. The exact amount owed under the policy was reserved for further motion.

Farmers moved for summary judgment, requesting a finding that the Dombroskys were not entitled to additional replacement costs for the structure or costs for compliance with new building codes. In addition, Farmers sought dismissal of the Dombroskys' claims of bad faith, violation of the Consumer Protection Act, negligence, outrage, and the negligent infliction of emotional distress. The motion was granted. The Dombroskys' motion for reconsideration was denied.

The Dombroskys brought remaining claims involving the additional contents recovery, additional living expense, and landscaping portions of the policy. Farmers attempted on several occasions to deposit funds in the court registry, which the Dombroskys declined. The Dombroskys then moved for summary judgment regarding the contents and the landscaping claims. This motion and Farmers cross motion on the same issues were denied.

Farmers moved for and was granted an order for appraisal of the remaining claims. The appraisal panel entered an award in favor of the Dombroskys of $2,095.50 for additional living expenses. The panel concluded the Dombroskys were not entitled to additional recovery for contents or landscaping. The award was reduced to judgment and the action was dismissed. The Dombroskys appeal.

ANALYSIS

The standard of review of an order of summary judgment is de novo. Mountain Park Homeowners Ass'n, Inc. v. Tydings, 125 Wash. 2d 337, 341, 883 P.2d 1383 (1994). A summary judgment motion brought under CR 56 can be granted only if the pleadings, affidavits, depositions, and admissions on file demonstrate there is no genuine issue of any material fact and that the moving party is entitled to judgment as a matter of law. Wilson v. Steinbach, 98 Wash. 2d 434, 437, 656 P.2d 1030 (1982). The court must consider all facts submitted and all reasonable inferences from them in the light most favorable to the nonmoving party. Wilson, 98 Wash. 2d at 437.

Once the moving party has submitted adequate affidavits, the burden shifts to the nonmoving party to set forth specific facts that sufficiently rebut the moving party's contentions and disclose the existence of a material issue of fact. Seven Gables Corp. v. MGM/UA Entertainment Co., 106 Wash. 2d 1, 13, 721 P.2d 1 (1986). The nonmoving party may not, however, rely on speculation, argumentative assertions that unresolved factual issues remain, or in having its affidavits considered at face value. Seven Gables, 106 Wash. 2d at 13. The court ...


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